Saudi’s USD22.5bn rail project heats up MENA metro race

The Middle East has seen a surge in metro project contracts over the past year as governments realize the benefits of mass transit in supporting their public transportation initiatives and carbon reduction program.

Since the Dubai Metro was launched in 2009, countries such as Saudi Arabia, Qatar, Kuwait, Egypt and Algeria have also stepped up their efforts to build metro rail systems. The list includes four-line metro projects in Doha and Kuwait, a metro network in Cairo and three extensions on the existing Algiers metro.

In July 2013, Qatar Rail, in association with Qatar Development Bank (QDB) and a global consultant, announced that it has identified around 104 metro-related opportunities for the local private sector. Mass transit projects promote mobility and encourage population redistribution, construction of new districts, creation of employment opportunities, and development of railway supply industries in surrounding areas, according to industry experts.


In Saudi Arabia, the government has embarked on a USD 22.5 billion plan to build Riyadh’s first metro rail system, which a Reuters report said aims to achieve more than improving the quality of life in the congested capital.

“It is part of an ambitious effort to shift the country’s economy beyond oil. The metro systems may also help Saudi Arabia manage its oil resources more efficiently – only about 2% of Riyadh’s 6 million population currently use public transport, leaving most of the rest dependent on gasoline-guzzling cars,” the report noted.

In the last week of July, the government awarded contracts for the system to three foreign-led consortia. Six rail lines carrying electric, driverless trains and extending 176 kilometers (110 miles) are to be completed by 2019.

Similar projects are underway in other major Saudi cities. Last August, the government approved a USD 16.5 billion plan to modernize the transport system in Makkah, including construction of a metro. Jeddah is also planning to build a metro that would cost around USD 9.3 billion.

“Growth in domestic oil consumption, as the country’s young population expands, has been outpacing [gains] in oil production capacity. So over the next decade or two, Saudi Arabia could be forced to cut back its oil exports; the metro systems buy it time before it faces such a crunch,” said the report.

The Riyadh metro is projected to carry 1.16 million passengers daily when launched, increasing to nearly 3.6 million within 10 years – a significant fraction of all trips in the country, which currently has a population of 28 million. Properties at 32 sites will be acquired for the Riyadh Metro project, said Ibrahim Al-Sultan, president of Arriyadh Development Authority (ADA), in July. “We have set up a special committee at ADA for land acquisition.”

Dr. Abdel Fattah Toukan, partner and vice-president of BKCN Engineering in Canada, also foresees the rail projects in Saudi to enrich the lands around the railway boundaries, facilitate commercial activities and link cities to markets, serve pilgrims and enhance religious tourism.

Besides the metro, Saudi also has other major rail infrastructure projects in the pipeline such as the Mineral Railway, Saudi Land Bridge and the Makkah-Madinah high speed line, Toukan added. Future projects could also look into developing infrastructure that supports the movement of oil commodities within the region, but such railway projects “should be in parallel with a water channel that links the Gulf Sea with the Red Sea and a major pipeline project for crude oil transportation,” he commented.


Parsons Brinckerhoff’s Aghdam said that sustainability concerns could result to some projects being implemented at a later date so that developers may be able to deal with the supply and demand constraints.

Meanwhile, Manda of Frost & Sullivan said the region will face huge challenges in finding specialists and experienced staff as there are more announcements than actual construction. “We expect to see some movement on the Abu Dhabi Metro project, which is in the advanced planning stage. Egypt is still in troubled mode. We are optimistic about some visible growth in the latter part of 2014 within the metro and rail sector, where growth can be measured in terms of construction timeline,” he said.

Toukan said the expected infrastructure growth in the region also needs solutions such as greater government responsibilities and engagement, changes in law and regulations as well as international funding.

“Demand will outstrip supply within the next 20 years as the region will need metros and high speed trains for expanding cities,” he said. “Overall, the growth of rail supply market will continue well through 2015-2017 based on a generally favorable environment for rail combined with the high growth rates in MENA and the high oil prices. Within the [next] three years, the region will be a hub for rail professionals, financial institutions, bankers, business development companies, contractors and consultants competing with best technical and financial offers and maintenance programs.”

Detailed planning is also critical and the integrated transportation solutions should be specific and timely, added Aghdam. “This will need sufficient number of experienced staff (from the clients and the consultants) to work and develop strategically and tactically the roadmap for the development, planning and implementation of metro programs,” he said.

“The transportation solutions should reach out and provide the services to the public, which it intends to serve. It requires the understanding of the longer-term needs, anticipation for change and response to the change at the appropriate time.”